New Jersey gas tax hike: What it means for motorists
New Jersey lawmakers are looking to implement a gas tax hike as a way of generating revenue for the state's transportation projects.
The plan includes a 23-cent increase per gallon of gas, as well as decreasing the state's sales tax from 7 percent to 6 percent.
The plan has already been approved by the New Jersey Assembly and Gov. Chris Christie says that he will sign the plan if it is approved. The state Senate is set to vote on the plan Thursday.
If the plan is put into place, it would go into effect Friday, July 1.
The tax hike has left some New Jersey residents wondering if the 23-cent increase will go up as gas prices rise.
There is a cap on the gas tax. However, it is not based on the price of fuel per gallon, but based on how much money the state would take in.
At the end of the year, the state would calculate how much money it would have taken in had the higher gas tax been in effect for all of 2016. That number would become the tax cap going forward; the state would be guaranteed to make that much money in gas taxes each year. No more or no less.
This means that if New Jersey residents buy more gas each year the gas tax would automatically go down, to collect the same amount of money. If residents buy less gas each year, the tax could increase to make up the difference.
The reason for the proposed hike is to replenish New Jersey's transportation trust fund, which is set to run out of money very soon.